See programs you qualify for
Get Matched Free →By Tyler Thompson · Licensed Real Estate Agent · Updated May 4, 2026
Homebuyer Programs in Rochester, MN (2026)
Rochester is southeastern Minnesota's largest city, home to roughly 122,000 residents and Mayo Clinic's flagship campus. The median home price sits around 9,000, putting Rochester ahead of most of greater Minnesota in pricing. The city of Rochester does not run its own down payment assistance grant program, so the local landscape is built on nonprofits. First Homes — a subsidiary of the Rochester Area Foundation — operates a Community Land Trust with 300+ homes plus a Gap Loan worth ,000 for existing homes or ,000 for new construction. Three Rivers Community Action runs a regional Gap Financing program of up to ,000 (currently out of funds; expected to refresh). Two Rivers Habitat for Humanity is the local Habitat affiliate building and renovating homes for affordable purchase with sweat equity. Layer any of these with Minnesota Housing's Start Up first mortgage plus the Deferred Payment Loan (up to ,500) or Monthly Payment Loan (up to ,000), and the First-Generation Homebuyer Loan adds another ,000 for eligible buyers. Stacking can produce 0,000+ in combined help.
State Programs in Minnesota
| Program Name | Type | Amount | First-Time Only | Details |
|---|---|---|---|---|
| Minnesota First-Generation Homebuyer Loan Program | Deferred Loan | — | Yes | View → |
| Minnesota Housing Deferred Payment Loan | Deferred Loan | — | Yes | View → |
| Minnesota Housing Monthly Payment Loan | Repayable Loan | — | No | View → |
| Minnesota Housing Start Up Program | Government-Insured Mortgage | First mortgage with as little as 3% down | Yes | View → |
| Minnesota Housing Step Up Program | Government-Insured Mortgage | First mortgage; can also be used to refinance | No | View → |
- Type:
- Deferred Loan
- First-time only:
- Yes
- Type:
- Deferred Loan
- First-time only:
- Yes
- Type:
- Repayable Loan
- First-time only:
- No
- Type:
- Government-Insured Mortgage
- Amount:
- First mortgage with as little as 3% down
- First-time only:
- Yes
- Type:
- Government-Insured Mortgage
- Amount:
- First mortgage; can also be used to refinance
- First-time only:
- No
Federal Programs
| Program Name | Type | Amount | First-Time Only | Details |
|---|---|---|---|---|
| FHA Loans | Government-Insured Mortgage | Up to FHA county loan limits ($541,287 floor to $1,249,125 ceiling for single-family in 2026) | No | View → |
| Good Neighbor Next Door (HUD) | Government Property Sale Program | 50% discount off the list price of HUD-owned homes | Yes | View → |
| Home Possible Mortgage (Freddie Mac) | Government-Guaranteed Mortgage | Up to conforming loan limits ($832,750 standard / $1,249,125 high-cost in 2026); 3% minimum down payment | No | View → |
| HomeReady Mortgage (Fannie Mae) | Government-Guaranteed Mortgage | Up to conforming loan limits ($832,750 standard / $1,249,125 high-cost in 2026); 3% minimum down payment | No | View → |
| HUD $100 Down Program | FHA-Financed HUD REO Purchase | Only $100 down payment required (vs. standard 3.5% FHA down payment). HUD may also pay up to 3% of buyer's closing costs. | No | View → |
| USDA Rural Development Loans | Government-Guaranteed Mortgage | 100% financing (no down payment required); loan amount up to appraised value | No | View → |
| VA Loans | Government-Guaranteed Mortgage | No loan limit for veterans with full entitlement (0% down at any price); partial entitlement subject to conforming limits ($832,750 standard in 2026) | No | View → |
- Type:
- Government-Insured Mortgage
- Amount:
- Up to FHA county loan limits ($541,287 floor to $1,249,125 ceiling for single-family in 2026)
- First-time only:
- No
- Type:
- Government Property Sale Program
- Amount:
- 50% discount off the list price of HUD-owned homes
- First-time only:
- Yes
- Type:
- Government-Guaranteed Mortgage
- Amount:
- Up to conforming loan limits ($832,750 standard / $1,249,125 high-cost in 2026); 3% minimum down payment
- First-time only:
- No
- Type:
- Government-Guaranteed Mortgage
- Amount:
- Up to conforming loan limits ($832,750 standard / $1,249,125 high-cost in 2026); 3% minimum down payment
- First-time only:
- No
- Type:
- FHA-Financed HUD REO Purchase
- Amount:
- Only $100 down payment required (vs. standard 3.5% FHA down payment). HUD may also pay up to 3% of buyer's closing costs.
- First-time only:
- No
- Type:
- Government-Guaranteed Mortgage
- Amount:
- 100% financing (no down payment required); loan amount up to appraised value
- First-time only:
- No
- Type:
- Government-Guaranteed Mortgage
- Amount:
- No loan limit for veterans with full entitlement (0% down at any price); partial entitlement subject to conforming limits ($832,750 standard in 2026)
- First-time only:
- No
Nonprofit Programs
| Program Name | Type | Amount | First-Time Only | Details |
|---|---|---|---|---|
| First Homes Community Land Trust | Deferred Loan | Subsidized purchase price; First Homes typically reduces home cost by removing the land value from the price | No | View → |
| First Homes Gap Loan | Deferred Loan | — | Yes | View → |
| Three Rivers Community Action Gap Financing | Deferred Loan | — | Yes | View → |
| Two Rivers Habitat for Humanity Homeownership Program | Repayable Loan | Affordable mortgage on a Habitat-built or Habitat-renovated home; sweat equity required | No | View → |
- Type:
- Deferred Loan
- Amount:
- Subsidized purchase price; First Homes typically reduces home cost by removing the land value from the price
- First-time only:
- No
- Type:
- Deferred Loan
- First-time only:
- Yes
- Type:
- Deferred Loan
- First-time only:
- Yes
- Type:
- Repayable Loan
- Amount:
- Affordable mortgage on a Habitat-built or Habitat-renovated home; sweat equity required
- First-time only:
- No
How to Apply
Step 1: Check your eligibility. Most Rochester programs require household income at or below 80% Area Median Income. The First-Generation Community DPA Fund (statewide) caps Olmsted/Dodge county income at 5,600.
Step 2: Complete homebuyer education. The Minnesota Homeownership Center's 8-hour Home Stretch class is required by Three Rivers Community Action and accepted by First Homes and the state programs. Three Rivers can also deliver the class — call 507-316-0610.
Step 3: Decide between a market home or a CLT home. If you want maximum subsidy and accept resale restrictions, look at First Homes' CLT inventory. If you want a market home, focus on layering Minnesota Housing programs with a First Homes Gap Loan and any available Three Rivers gap funds.
Step 4: Get pre-approved with a participating lender. Use a Minnesota Housing-approved lender if you want Start Up, Step Up, the Deferred Payment Loan, or the Monthly Payment Loan. First Homes and Three Rivers maintain their own partner lender lists.
Step 5: Apply for the layered DPA. Submit a First Homes Gap Loan application to emily@rochesterarea.org. Three Rivers applications are made directly through their Rochester office. Verify Three Rivers funding status before relying on it.
Step 6: Find a home within program limits. Minnesota Housing first mortgages have purchase price limits up to 7,950 in the Twin Cities metro and lower in greater Minnesota — check the current Rochester limit with your lender.
Step 7: Submit and close. Your lender layers the first mortgage, state DPA, and any local gap funds at closing. Plan on 30-45 days from purchase agreement to close.
Frequently Asked Questions
How much down payment assistance can I get in Rochester?+−
Does the city of Rochester offer down payment assistance?+−
Do I have to be a first-time homebuyer?+−
What is the maximum home price?+−
How does First Homes' Community Land Trust work?+−
What does the Two Rivers Habitat process look like?+−
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